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Illustration: Sarah Grillo/Axios

Yesterday's landmark lawsuits against Facebook cap four years in which tech companies' national standing has turned upside-down even as their fortunes have boomed.

When Vice President Joe Biden left office in Jan. 2017, Facebook, Google and other tech giants had the proud luster of American success stories. When President Biden takes office next month, his government will be charging Facebook and Google both as harmful monopolists — and pushing to break Facebook up.

Driving the news: The Federal Trade Commission on Wednesday filed a lawsuit against Facebook, asking a federal court to claw WhatsApp and Instagram away from the social media giant because, the agency charges, Facebook used its acquisitions of those companies to firm up its dominance and choke off competition.

The intrigue: Facebook, along with Twitter and Google, has been a favorite punching bag for President Trump, who claims Big Tech is biased against him and other conservatives. But the case is apolitical and won backing from the agency's two Democratic commissioners.

  • Notably, two GOP commissioners opposed the suit — but Chairman Joe Simons, also a Republican, crossed party lines to join the Democrats in voting it forward.

It's joined by a parallel suit from 48 state and territorial attorneys general, who make the same broad-strokes arguments that Facebook operates an illegal monopoly but focus on a slightly different set of perceived harms.

  • The FTC contends Facebook unfairly blocked rival tech firms from knitting their services with its platforms, while the AGs say a more competitive social media landscape would have resulted in greater privacy protections for consumers.

New York Attorney General Letitia James, a Democrat, is leading the states' case, which is strongly bipartisan. The only states sitting it out are Georgia, South Carolina, South Dakota and Alabama.

  • Both suits got warm receptions from Democrats, with Rep. David Cicilline (R.I.), who chairs the House Judiciary antitrust panel, saying in a statement, "Facebook has broken the law. It must be broken up. I applaud the FTC and state attorneys general who are leading this effort today."

Meanwhile: The Justice Department sued Google in October, alleging the company was running its own illegal monopoly in online search, chiefly by locking up exclusive agreements to be the search default on browsers and mobile devices.

  • That case, too, was cheered by Democrats, who have led the Washington charge in recent years in calling for more aggressive antitrust enforcement against Big Tech.

Between the lines: The cases are in some sense a rebuke of the Obama administration's regulatory policy, which broadly looked on tech combinations as part of Silicon Valley's virtuous cycle of growth and innovation.

  • Biden is seeking a return to Obama-era normalcy in many respects, but is unlikely to do so here. Taking on Big Tech is now mainstream Democratic orthodoxy.

The catch: The FTC and states have to prove that rejecting Facebook's acquisitions would have made life better for consumers and increased industry competition — a tough case to make, legal experts told Axios.

The court will be looking at whether the acquisition of WhatsApp, for instance, was lawful when it occurred in 2012, not whether it would be lawful now, said Kristen Limarzi, a partner at Gibson, Dunn and Crutcher and former chief of the appellate section of the DOJ antitrust division.

  • One hurdle for the FTC is "that they reviewed the transaction and cleared it," she said. "Their suit depends on admitting they made a mistake in 2012, and that’s a tough spot for any litigant to be in."
  • It’s not common for the FTC to try to undo previous acquisitions, but it has happened, said Jeffrey Jacobovitz, a partner at Arnall Golden Gregory LLP and former antitrust attorney at the FTC. He called the FTC’s suit "super aggressive."

Go deeper:

Go deeper

Jan 28, 2021 - Technology

Facebook Oversight Board overturns 4 of its 5 first cases

Illustration: Aïda Amer/Axios

Facebook's independent Oversight Board published its first set of decisions Thursday, overturning four of the five cases it chose to review out of 20,000 cases submitted.

Why it matters: The decision to go against Facebook's conclusions in four out of five instances gives legitimacy to the board, which is funded via a $130 million grant from Facebook.

App rush: Talent over trash

Data: Knight First Amendment Institute at Columbia University. Chart: Michelle McGhee/Axios

Amid the sea of pollution on social media, another class of apps is soaring in popularity: The creators are paid, putting a premium on talent instead of just noise.

The big picture: Creator-economy platforms like Patreon, Substack and OnlyFans are built around content makers who are paid. It's a contrast to platforms like Facebook that are mostly powered by everyday users’ unpaid posts and interactions.

Jan 29, 2021 - Technology

Facebook developing a tool to help advertisers avoid bad news

Photo Illustration: Avishek Das/SOPA Images/LightRocket via Getty Images

Facebook on Friday said it's testing new advertiser "topic exclusion controls" to help address concerns marketers may have that their ads are appearing next to topics in Facebook's News Feed that they consider bad for their brand.  

Why it matters: As Axios has previously noted, the chaotic nature of the modern news cycle and digital advertising landscape has made it nearly impossible for brands to run ads against quality content in an automated fashion without encountering bad content.